Scenario 1: Snowflake became involved in an investigation by the Environmental Protection Agency (EPA). Below are the events that transpired: 11/1/2019 Alleged damage caused by Snowflake 12/31/2019 Fiscal Year End 1/7/2020 Investigation began by the EPA 2/1/2020 The EPA issued a fine to Snowflake 2/8/2020 Snowflake reached and paid a settlement to the EPA 2/15/2020 Financial Statements Filed with the SEC It is important to note that Snowflake was unaware of any problems until an investigation was begun by the EPA. Also note that as soon as investigation was started by the EPA, Snowflakes management team assessed that it was probable that a claim would be asserted, and it was reasonably possible that they would lose the claim. How should Snowflake account for this situation [2.5 points]: Multiple Choice Accrue and disclose Neither accrue nor disclose Disclose only

Scenario 1: Snowflake became involved in an investigation by the Environmental Protection Agency (EPA). Below are the events that transpired: 11/1/2019 Alleged damage caused by Snowflake 12/31/2019 Fiscal Year End 1/7/2020 Investigation began by the EPA 2/1/2020 The EPA issued a fine to Snowflake 2/8/2020 Snowflake reached and paid a settlement to the EPA 2/15/2020 Financial Statements Filed with the SEC It is important to note that Snowflake was unaware of any problems until an investigation was begun by the EPA. Also note that as soon as investigation was started by the EPA, Snowflake's management team assessed that it was probable that a claim would be asserted, and it was reasonably possible that they would lose the claim. How should Snowflake account for this situation [2.5 points]: Multiple Choice Accrue and disclose Neither accrue nor disclose Disclose only